Health Care Costs and Financing

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SCHIP significantly decreases uninsurance and increases public insurance for children in low-income families

The State Children's Health Insurance Program (SCHIP) significantly decreased uninsurance and increased public insurance for both children targeted by SCHIP and those eligible for Medicaid during the 1996-2002 period, concludes a study by researchers at the Agency for Healthcare Research and Quality (AHRQ). The study was conducted by Julie L. Hudson, Ph.D., Thomas M. Selden, Ph.D., and Jessica S. Banthin, Ph.D., of AHRQ's Center for Financing, Access, and Cost Trends. They analyzed data between 1996 and 2002 from the Medical Expenditure Panel Survey, a nationally representative survey of U.S. household health care expenditures, using a range of estimation strategies to calculate changes in public coverage, private coverage, uninsurance, and crowd-out of private insurance.

Earlier studies found that the percentage of children with public coverage rose from 21.5 percent in 1996 to 26.3 percent in 2002.

Uninsurance declined by more than 3 percentage points from 16.4 percent to 13.1 percent. The prevalence of private coverage initially increased, rising by 3 percent between 1996 and 1998. It fell thereafter, ending up 1 percentage point lower in 2002 than in 1996.

Across a wide range of estimations in the current study, the researchers found that the 1996-2002 SCHIP expansions were associated with increases in public coverage and decreases in uninsurance. They also found evidence of declines in private coverage (from families who shifted from private to public coverage) that in some cases generated high crowd-out estimates, but these lacked robustness and precision. The researchers caution that crowd-out is only one imperfectly measured aspect of designing public policies for enhancing child and family welfare. A more complete analysis should consider the potential benefits to these children and their families from lower premium and out-of-pocket expenditure burdens and perhaps improved access.

More details are in "The impact of SCHIP on insurance coverage of children," by Drs. Hudson, Selden, and Banthin, in the Fall 2005 Inquiry 42, pp. 232-254. Reprints (AHRQ Publication No. 06-R018) are available from AHRQ Clearinghouse.